Well, now we're into a new territory.

Hmm....I may have been a little optimistic in the assessment of the financial situation at large. Us folks working in my industry (Digital Media Development) are still very busy, so maybe I didn't really see it so well. Also, NYC is pretty darn diverse in terms of the kinds of industries here.

http://www.clusterstock.com/2008/10/sp500-worst-decline-for-year

"You can't sugarcoat it... We're now looking at the worst year-to-date decline in the S&P 500 ever."

The year-to-date drop is right around -33.7%

BUT

According to Political Calculations, the worst 12-month period (not calendar year) for the S&P 500 was June 1931-July 1932, when it fell 63.8%.

Well, I guess I have to admit, the manure has indeed hit the HVAC inlets.

At the same time, I have no intention of cutting back on my LOCAL spending that much. In fact, I'm increasing it. LOCAL merchants are people I know, owners of small businesses, making middle-class wages just like me, and I'd like to see them stay in business. So maybe I'll spend 50 cents more than Home Depot on that set of door hinges at the local hardware store - but Gene has been there for almost 40 years, and he's been a great guy to me and my family. And so forth.

2009 is going to be a year we'll be telling our grandkids about.

Saving my $ for home repairs....

Greetings,

I have been going to my local merchants first for quite a few years. If they don't carry what I need, then I'll go to the big box stores.

We've started going to the local Farmer's Market before going to the grocery store, so as to keep as much of our money in the local area, as possible.

I've come up with additional contingency plans to start providing more of our own food via garden vegetables and possibly chickens/eggs. Procuring and developing a canning capability is already in the works.

Since I stay confused on whether I am an "Optimistic Pessimist" or a "Pessimistic Optimist", I expect some hyperinflation in the near future (good time to pay off bills) before we can expect deflation. I feel that the coming times are going to create some disruptions in the "just in time" delivery system which is going to translate into some grocery shelf empty space, gas shortages, etc.

IMHO, this is a very good time to explore and/or create "options" that will address my worse fears. I am preparing my back yard to better support a garden. This requires removal of a tree and an old wooden jungle gym/fort. Building some raised garden beds, procuring more pots (for herbal plants), etc. I'm even entertaining some ideas for making the front yard productive for some gardening.

I agree that things are a changing.

I too have upped my tips to 25% and shop locally. I also joined a food co-op to keep food production local. The closer the food is made the better (in my opinion). $500 and I get enough organic veggies for a family of four for the year.

I'm not too worried about me...but ugggh. the food banks are under heavy load where I live and the economy hasn't bottomed out yet.

I usually donate $500-$1000 dollars a year to the food bank (I've had so many blessings myself), but I worry about my friends too. Most of them do not have the preparedness mindset. It pains me to think that friends, families and children may go without food.
What can you do for them? Keep stocks set aside for them? I live in an apartment where room is at a premium.

Let's hope things don't change THAT much eh?


Hope you are all doing ok! Remember that keeping your spirits up will pull up those around you. Keeping your cool will help others keep theirs.

Peace and love,

NIM

I tip when I am on expenses and the company pays, otherwise I will tip from my own pocket as soon as I start getting tips at my job.

I still don't consider this a recession. It is a market correction to reduce the fluff. This will winnow out the risk from the true value of the markets. Higher highs always mean lower lows in the market.

This too shall pass.

Agreed...sort of. It's definitely a recession. No question there for me.

Again, I think my opinions of things have been warped by the fact that my HR person is CONSTANTLY harping on us looking for new hires, and we seem to be always just on the edge of under-staffed, but not quite - we're "well utilized" in the parlance of the HR folks.

But that's in my industry, at my company, in New York City.

Back home, some folks (admittedly not terribly BRIGHT folks) are throwing around terms like "it's a depression, for sure" as if they have the slightest CLUE what a depression is like.

You see, some of my co-workers fled Russia in the early 1990's, as the Soviet Union collapsed, and they have told me of what an economic collapse is all about. It's not about a low-paying job, it's about going to the park, near the playground where your kids used to play, and cutting down the trees for fuel so those same kids don't freeze to death in the winter. It's about feeding a family from canned beans once a day, every day, for a year. It's about rushing to the sink to collect water during the 2 hours a day the power is on. This from a guy who's father was an established computer programmer in the USSR's space program, a man who, once he lost his job at the age of 61, never worked full time again until he died (at the age of 67). That's a collapse. What we're having now is an annoyance by comparison. Americans don't know what hardship is, I don't know what it is.

Speaking of new territory, now the Feds are considering becoming stakeholders in banks to restore confidence in the banking system. Does this instill confidence in you? Can this be anything but a bad idea?

http://www.foxnews.com/story/0,2933,434844,00.html

hey maybe they will do what iceland did, and set it up where the government can take over any company as needed, force board meetings to convene, etc...

Its quite strange, but I was going to link the article for you. its here .

But the article seems to be completely rewritten.

I've posted the original here .

The part I'm referencing says: ... referring to the sweeping new powers that allow the government to take over companies, limit the authority of boards and call shareholder meetings.

Thats NEW TERRITORY. Actually, its old territory. But you know the saying, if a little of a bad thing doesn't work, try a lot of a bad thing.

That is a saying isn't it?

Even the US National Debt clock in New York has just ran out of digits enough to display a number greater than $9,999,999,999,999.

http://edition.cnn.com/2008/US/10/09/national.debt.clock.ap/index.html




Well, at least someones got a sense of humour..

Katrina was "new territory" for New Orleans. They'd survived hurricanes before so folks always expected to survive them every time afterwards. All it takes is being wrong once.

It is possible that this time it is indeed different. There are a number of factors which add up to a different environment in which to recover which could inhibit or prevent the recovery.

As preparedness folks we ought to be willing to examine and prepare for the entire spectrum of possibilities. (i.e. Keep that axe sharp so that you can be first to the park to get your firewood :-(

I'm still waiting to hear that China has suddenly imploded, their demand for our goods is dropping like a stone, their factories that make all of our stuff cheaply are closing up in droves, they're selling their dollar reserves, and will stop buying our new debt from now on. Now that would be earth-shaking.

Yep, China can take us down without firing a shot.

Actually, I was talking to my assistant in Ningbo last night, and China is sufferring a similar panic to what we are seeing here. She said real estate is losing value, stock market is bad, its the same story as here just refried a bit.

The Chinese are starting to settle in eastern Russia, too. I guess they'll claim squatters rights and nationalize it. Russia's a bit too chaotic to start a war with China.

Ups and downs of the Stock Market:

Aug 24, 1921 = 64
Sept 3, 1929 = 381
Nov 11, 1929 = 228 (-40%)

From August 1982 to August 1987, Dow Jones went from 776 to 2722.
Oct. 14 to 19, 1987 = Dow Jones dropped 760 (31%)

Dow Jones history (edited)
Jan 2, 1900 68
Jan 2, 1910 81
Jan 2, 1920 109
Jan 2, 1930 244
Jul 8, 1932 41
Jan 2, 1940 151
Jan 2, 1951 240
(none shown for 1950)
Jan 2, 1960 616
Jan 2, 1970 809
Jan 2, 1980 825
Jan 8, 1987 2,002
Oct 19, 1987 1,738
Jan 2, 1990 2,810
Jan 14, 2000 11,723

Jan 2, 2001 10,646
Jan 2, 2002 10,073
Jan 2, 2003 8,607
Jan 2, 2004 10,410
Apr 12, 2005 10,508
Jan 6, 2006 10,959
Jan 5, 2007 12,398
Jan 4, 2008 12,800
[http://www.nyse.tv/dow-jones-industrial-average-history-djia.htm]

Today (Oct 9) 9,144

The stock market is really just an indicator of faith.

What goes up, comes down.

This is an election year. 2003 wasn't. Stocks dropped about 15%. Did anyone notice? Was it the topic of every discussion in America?

A good friend of mine said "Follow the money. Always follow the money."

Who is profiting from this situation right now?

Sue

I'm not sure anyone is profiting right now in any big way. The problem is that huge profits have been pulled out of the mortgage lending industry over the last 7 years or so which were not based on real value. These commissions and fees going to the lending industry, and they were in the billions, were "funded" by inflated property appraisals and overly optimistic forecasts of the borrowers' ability to pay or refinance. Add in a sophisticated scam that dumped lousy mortgages into the bond market (!) with more commissions changing hands at every stage, and you soon realize that this cash cow has been milked dry.

All those outfits knew exactly what they were doing. And don't tell me some of them were making large amounts of money hand over fist. Sure, a lot of it got lost in the 'translation', but a lot of it is probably in the Cayman Island banks.

Sue

One of my favorite daily reads. Some call Roubini "Mr. Doom," but so far he's been pretty accurate.




http://www.rgemonitor.com/roubini-monitor

IMHO, Often, a paycut beats not having a job, especially in this job market.

This being the start of a worldwide economic collapse and all, I figure I need more friends because among my friends, family, co-workers and acquaintances, I'm not aware of ANYONE who has:

Lost his job
Had his pay cut
Had a car repo'ed
Been foreclosed on
Lost his health insurance
Closed his business
Moved into a homeless shelter
Began working for food

So I'm having a little trouble working myself up to a proper level of panicked frenzy. Plus I'm expecting an offer for a new job (w/ pay increase) any day now.

Plus gas and heating oil prices are back down to where they were a year ago and still going down.

Sorry.

Except for BigDaddyTX.

We all work for food

It's really a matter of your industry - if you're in public safety, there's plenty of work. If you're super-great whiz with all of Adobe CS3, if you can code PHP faster and better than others, if you are a hot-shot CSS/HTML/DHTML/XSL coder, there's plenty of work.

On this forum, I know of at least one person who had a forclosure, a few of us here have lost jobs, etc....

Okokok...

My fault for not including a bunch of strange men from the internet as part of my sample group

I noticed about 6 months ago that the usual chatter (VHF-FM radio) between pilots discussing the next expected pay raise......wasn't there, has not happened.

I noticed a conversation (via VHF-FM radio) about two weeks ago concerning the likelihood of a pay cut (which was deemed acceptable) vs. layoffs.

About 2 days ago, we were told by our Port Captain to expect word to come down from the "Chain of Command (executives) that we will have to tighten up our Grocery and Supply Budgets.

The dominos have started falling, albeit in slow motion, but they have started falling. At least from my perspective.

I'm surprised, not a single reply to these financial threads today. Does everyone have Columbus Day off???

Or, since the stock market has regained half of last week's losses in a single day, do we all think we're out of the woods? Is the Panic of 2008 already yesterday's news?

Maybe today is a dead cat bounce. Actually, check out the animation in this link. Who knows? Maybe the last 5-6 years since the dot-com crash is one big dead cat bounce? Maybe today's rally was just a speed bump on the way down the precipice started last week?

I've wondered for a long time now about the great bull market that started in the 80's. If you look at a chart of the stock market over time, although there's a general upward trend, the positive and negative periods always seems to balance each other out. But since the early 80's, the stock market is just way, WAY up and there's no balancing negative performace to balance it out. We've had a succession of bubbles propping up the market and the economy, plus the Fed and gov't have gotten more sophisticated as managing the economy. I don't want to sound all doom-and-gloom or anything, but unless we've truly licked the business cycle, I'm still wondering if the true adjustment isn't still out there ahead of us.

It could be sudden and extremely painful, or it could be like Japan, where the stock market just grinds lower and lower for decades. Stocks could stay down so long that when our kids grow up, they won't understand how any of us in our generation thought that buying and holding stocks was a smart way to save for retirement. But I guess that's how these cycles usually work--things go so low for so long that everyone is sick of looking at it. Only then does it suddenly boom and start the next cycle. As long as people are still bullish enough about stocks, even with last week's drop, to agree with the idea of "Buy the dips," then stocks haven't fallen enough yet. Anyway, just my random thoughts for the day.

My thoughts are that this current stock market is mirroring the stock market behavior back in 1929. It made the same bounces!!

I think you'll see a new drop after OPEC announces reduced output at the conlusion of their next meeting scheduled for Nov 18th. Lower output will drive the price of crude back upwards. That will increase pressures on the markets.

That's my opinion and y'all know what opinions are worth.

Maybe we can get back to an economy based on actual work (labor) and providing value rather than rewarding mere paper shuffling as the means to wealth.

Well said, Robert.

Wow, yesterday was another gut-wrenching 733 point drop...and not a single post. Seriously, I think this crisis has become yesterday's news already even thought we're still in it.

I fear that this global injection of gobs and gobs of money into the financial world has just planted the seeds of yet another financial mini-bubble, or just postponed the Day of Reckoning that we started to slide into last week. So, a collective "we" will still end up in the dog house...only a trillion dollars more in debt than we otherwise would have been without all these endless bailouts recently (most people only know or think about the $700 billion bailout, but there have been multiple "bailouts" this year).

I can't think of anything to say that would make the pain go away.

I think you see the markets testing bottoms and trying to find new trading ranges. Things are not stable and no one KNOWS the levels at which things will stabilize or when that will occur.

Also, I think many people who have looked at the things that have been happening think that there will be a change that's not necessarily good when things begin to improve.

Currently, business is stalled, and we are in a deflationary environment. Deflation is just bad unless you've got wads of cash and little else. Banks, investors, and almost everyone is hoarding cash, if they can, and trying to preserve the capital they have now. Government is trying to force people to stop this using the tools they have, and one of those tools is to make people want to spend money. Why would someone want to spend money? Perhaps because holding onto it as cash is going to cost you, that means government will continue to work towards inflationary policies until that happens. So, we are likely to go from deflation to inflation, but when is the big question. Timing markets is like practicing alchemy. Being prepared is to try to see that things are beginning to change and acting to place yourself and your money properly.

I haven't changed my opinion from last month, which is that the market will fall a little below 8,000 this year before it stabilizes and the oscillation settles down. Then it will slowly start creeping up again. With all the speculators off licking their wounds, the market will be driven by real value investment, and a much more conservative trading personality, where investment will be based more about whether a company can actually achieve a higher net worth by production share. I know that isn't what the stock market is about anymore, but it is still sound investment advice.

I'm already seeing affects in my business as clients and suppliers cut jobs and scale back projects as they begin to have cashflow problems.

I don't understand much about "high finance" nor economics, so that may contribute to my growing *feeling* of unease.

If I understand it, the liquidity problems that banks are experiencing are deflationary.

I know some oil producing countries have been moving away from U.S. dollars to other currencies. (pre-war Iraq, Iran, Russia, Venezuela, ring any bells?)

I know the federal Reserve has been printing a huge amount of dollars this year and last, and this increase in the money supply has been creating inflation.

It seems the value of the U.S. dollar is in grave jeopardy.

On a personal, day-to-day basis, I've basically been in scramble mode for a few months and am making good progress but not quickly enough I fear. Just trying to keep a level head, keep doing what I think I need to do and move ahead faster than I usually do. Definitely new territory for me!

I hear ya, Henry. But you've got the right attitude. Don't panic but do what you think is the right thing to do even if other people around you may be losing their heads.

Local report:

I'm getting about half the people I talk to speaking in a panic-type tone. Even professors have said they have serious concerns and wonder what to do. A good portion of my friends have lost 15% of their savings this year. People are worried....well half of them are...the rest may have untouchable faith.

The local mine used to sell metal at $23+/lb now it is at $5/lb.
I haven't seen anything like this (I mean people's opinions). I'm in Canada (whose banking system was rated #1 world wide). What is it like where you guys (and gals) are?

What is the feeling of the people that you talk to?

Looking with a certain level of detachment,

NIM

Now I know what they mean when the talk about skydiving: "Why would you jump out of a perfectly good, safe, secure airplane?"

Well, I just (literally minutes ago) jumped out of a perfectly good, safe, secure job into the unknown. This during the "Worst Economic Crisis Since The Great Depression"

Best of luck to ya!

-Blast

Most of the people I am around are pretty much business as usual.

It just seems like so much fooferah right now. I am inclined to believe that eventually this mess will catch up with us, but right now it is too soon for the vast majority of us to feel the immediate impacts of the market correction. Maybe it is just that my present situation is more insulated than others, but I don't see anyone really taking a big hit around me yet. I expect it will come, but it is still far off on the horizon from my perspective.

One company in the Marine Industry started releasing some of the boats chartered by them.

When all the Chartered boats have been released, then the leased boats will be let go as their leases expire.

That's when you will start seeing the small Marine Transportation Companies start to fold, thus easing the shortage of Pilots, Engineers, Tankerman, and Deckhands as they become laid off from those failed companies.

The process has been started and is being accelerated by the credit crunch since "Letters of Credit" are not being issued by banks, thus ships are not being loaded, because overseas purchases cannot be transacted.

This also means that we can expect to see some shortages of goods on store shelves fairly soon!

Funny, I was a little bit worried about the same thing earlier in the summer when fuel prices were rising and truckers were all crying uncle. Now oil and fuel prices are dropping quickly. Who knows? A comeback of the SUV and American auto manufacturers???

I haven't heard anything on local news about operations at the Port of Los Angeles being affected yet.